# Briar is planning to apply for a new credit card and is considering the following three choices.

## Question:

Briar is planning to apply for a new credit card and is considering the following three choices. They are also planning to buy a $800 big screen television and plans to pay for this over a two-year period by making equal monthly payments.

Credit Card | Annual Interest Rate | Annual Fee |

MBNA True Line Master Card | 8.99% | $39 |

CIBC Select VISA Card | 13.99% | $29 |

American Express Essential Credit Card | 12.99% | $0 |

What would be their monthly payments for using the MBNA True Line Master Card over a two-year period? (1 mark)

What would be his monthly payments for using the CIBC Select VISA card over a two-year period? (1 mark)

What would be his monthly payments for the American Express Essential Credit Card over a two-year period? (1 mark)

How much in interest charges would he pay using the American Express Essential Credit Card (Hint: Total Interest = (number of payments * amount of payments) - loan amount)? (1 mark)

How much in interest charges would he pay using the CIBC Select Visa card (Hint: Total Interest = (number of payments * amount of payments) - loan amount)? (1 mark)

How much in interest charges would he pay using the MBNA True Line Master Card (Hint: Total Interest = (number of payments * amount of payments) - loan amount)? (1 mark)

How much in total financing costs (interest costs and annual fees) for the CIBC Select Visa Card over the 2-year period (Hint: Total Financing Costs = Total Interest Costs + Total Annual Fees)? (1 mark)

How much in total financing costs (interest costs and annual fees) for the MBNA True Line Master Card over the 2-year period (Hint: Total Financing Costs = Total Interest Costs + Total Annual Fees)? (1 mark)

How much in total financing costs (interest costs and annual fees) for the American Express Essential Credit Card over the 2-year period (Hint: Total Financing Costs = Total Interest Costs + Total Annual Fees)? (1 mark)

**Related Book For**

## Focus On Personal Finance

ISBN: 9780077861742

5th Edition

Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart